Arthritis is a widespread debilitating disease in which the joint cartilage becomes disintegrated. Regenerating cartilage in vitro may be part of a plausible treatment for these conditions. The understanding how cartilage is degraded and how to produce new cartilage through bioengineering requires a thorough understanding of the signaling events that take place during cartilage formation. Our long-range goal is to unveil the mechanisms that govern cartilage formation in the embryo, which will provide the knowledge for treating arthritis and other skeletal diseases. The objective of this proposal is to investigate the regulation of Nkx3.2 expression and nuclear localization during chondrogenesis. Our central hypothesis is that the control of Nkx3.2 is a key mechanism to cartilage differentiation. We will test our hypothesis by pursuing the following Specific Aims: 1. Investigate the mechanisms of Nkx3.2 nuclear localization controlled by pro-chondrogenic signals Shh, BMP and Sox9. 2. Examine the effect of cartilage-inhibiting signals TNF-a and IL-1 (i on Nkx3.2 expression and nuclear localization. 3. Determine if Nkx3.2 promotes cartilage differentiation in human mesenchymal stem cells. Nkx3.2 is an important protein because it not only promotes cartilage formation, but also prevents chondrocyte hypertrophy. Thus, Nkx3.2 is a plausible candidate to be introduced into the progenitor cells in order to promote the formation of permanent cartilage. Understanding the regulation of this protein will help us in our future research of introducing Nkx3.2 in adult stem cells to direct and maintain differentiated chondrocyte phenotype in our endeavor of cartilage bioengineering, and on developing remedies for arthritis.